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Feds Probe Three Large Panel Installers Over Inflated Costs

SolarCity workers install photovoltaic panels in West Los Angeles. SolarCity, SunRun and Sungevity, three major U.S. solar panel installers, are under investigation for overcharging the government for solar installations. (COURTESY Los angeles times)
SolarCity workers install photovoltaic panels in West Los Angeles. SolarCity, SunRun and Sungevity, three major U.S. solar panel installers, are under investigation for overcharging the government for solar installations. (COURTESY Los angeles times)
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WASHINGTON – Three of the country’s most prolific installers of residential solar panels are under federal investigation to determine if they inflated the cost of their work to increase the payments they would receive from the government, according to government and industry officials familiar with the probe.

SolarCity, SunRun and Sungevity have received subpoenas from the Treasury Department’s office of inspector general for financial records to justify more than $500 million in federal grants and tax credits the firms tapped for performing work. The probe seeks to determine whether the companies accurately reported the market value of their costs when applying for federal reimbursement, which was calculated at one-third of the costs.

The solar companies received money through the Treasury’s $13 billion program, known as the 1603 program, which used funds from President Barack Obama’s stimulus initiative to offer cash grants to clean-energy developers. The goal was to spur the spread of wind farms, solar panels and other clean-power sources nationwide.

SolarCity, SunRun and Sungevity have been by far the largest recipients among companies installing solar panels on homes. Working heavily in the sunny states of California and Arizona, the three firms collected hundreds of millions of dollars in federal cash grants to pick up a share of their costs on thousands of home installations during the past three years.

But the prices some of these industry leaders charged for their work were sometimes far higher than the broader industry’s market rate, according to solar experts and details of the Treasury investigation released in company reports. While firms can install solar panels for roughly $5 per watt of energy and make a comfortable profit, some firms were charging as much as $7 and $8 per watt.

SolarCity spokesman Jonathan Bass said Thursday the company believes its estimates were fair. Sungevity and SunRun declined to comment.

The companies could be forced to repay the government millions of dollars if problems are found, as well as face penalties.

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